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Colorado Springs employers battle tight labor market to fill openings

Caption +Steve Kanatzer, who is chairman of the Colorado Restaurant Association, said restaurants across the state are struggling to hire employees with the statewide unemployment rate being at least a 41-year low. Kanatzer is owner of The Airplane Restaurant. Tuesday, July 11, 2017. (Photo by Jerilee Bennett, The Gazette)

Colorado Springs employers could attract a roomful of applicants a few years ago for many job openings.

Today, they are lucky to get more than a handful of applicants for most jobs and many openings go unfilled for weeks or sometimes months in a job market with the area's unemployment rate near a 50-year low.

The Colorado Springs area's unemployment rate has dropped by more than half from 5.1 percent at the beginning of 2015 to 2.5 percent in April, the lowest monthly rate in Bureau of Labor Statistics records that start in 1990 and lower than any rate in records dating to 1970, though the rate was calculated differently before 1990.

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The fewer than 8,500 people looking for work in April was the fewest since 2001, even as the area's job market has added more than 50,000 workers in the past 16 years. The jobless rate and number of unemployed rose in May as more people returned to the job market.

"We have never seen anything like this. If you want to work, you are probably working or should be easily able to find work unless you have a major barrier such as addiction or homelessness," said Lisa Rice, who became CEO and executive director of the Pikes Peak Workforce Center last month.

The number of job openings posted by employers with the center has exceeded the number of people looking for work every month for most of the past 1½ years and the gap widened to more than 4,000 in April and May, according to data from CEB TalentNeuron, a unit of research giant Gartner Inc.

"In the past when I posted an opening, I would have a lobby full of people to interview, but now I am lucky to have two or three who respond," said Steve Kanatzar, owner of The Airplane Restaurant near the Colorado Springs Airport and chair of the Colorado Restaurant Association.

The shortage of workers poses a danger to the local economy, said Tatiana Bailey, director of the University of Colorado at Colorado Springs Economic Forum.

"If we can't meet the needs of employers, those that can will go elsewhere" to find the people they need to fill openings, Bailey said. "The communities that can figure out the top five to 10 job openings and train people for those jobs will be ahead of the curve."

Tom Binnings, a senior partner in Summit Economics, a Springs-based economic research and consulting firm, said the labor supply will be the major constraint to economic growth for at least the next five years locally, along the Front Range and in much of the rest of the nation. The only ways to reduce the growing gap between the supply and demand for labor is either to train more people to meet the qualifications for the jobs that are open or allow more immigration into the U.S. to help alleviate what he believes will be a worsening labor shortage.

"We will continue to see this labor bottleneck until we either attract enough people here to fill those openings or get enough people trained to meet the demand for workers," Binnings said. "The biggest problem is the split in the labor market between the skills of those who are looking for work and skills required for the jobs that are open."

That skills gap is clear from the top jobs that are open - six of the jobs with the most openings are either in technology or health care. In demand are software, systems or network engineers, network administrator, registered nurse, occupational therapist and medical assistant, nearly all of which require a college degree.

The unemployment numbers don't quite tell the whole story, Rice said, because they don't show how many people are working multiple jobs to make ends meet. Many of those workers are working two or three part-time jobs but would rather have a full-time job that pays enough to support them. Most workers holding multiple jobs, however, don't have the skills needed to land higher-paying full-time positions and would need additional training to meet the qualifications for those jobs, mostly in the health care, construction and technology industries, she said.

"That's why you see such high turnover in jobs that pay $10 an hour. People don't stay in those jobs long. They jump to a better wage job for a dime or quarter more an hour," Rice said.

Not every employer can afford to pay premium wages, Binnings said. Some use automation or technology to accomplish the same task previously performed by an employee if they cannot fill the opening at an affordable wage, while others will ask remaining employees to work overtime or just not fill the opening, he said.

The Workforce Center also is stepping up its recruiting and training efforts for those who have the most trouble finding work, including those looking for their first job out of high school or college, inmates who are being released from prison and the long-term unemployed who have been without a job for months or years, Rice said. Those efforts including subsidizing on-the-job training for young workers in their first jobs, arranging tours of prison job training programs for employers and launching social media campaigns to lure discouraged workers back into the job market, she said.

Employers in the industries where the labor shortage is most acute - health care, retailing, restaurants, construction and aerospace - have resorted to creative and innovative strategies to fill openings, including recruiting out-of-state workers and offering to pay moving expenses or paying referral bonuses to employees who help recruit. Their stories follow.

- Children's Hospital Colorado: The Aurora-based pediatric hospital operator has about 50 openings in the Springs for positions in its pharmacy, nursing, respiratory therapy and other therapy operations, said Pam Johnson-Carlson, who heads Children's nursing operations in Southern Colorado. Children's has far more openings than applicants in many medical specialties, including neurology, orthopedics and cardiology, and filling those openings can take up to 12 weeks, depending on the position and where the job candidate is working, she said.

The hospital has nearly 600 southern Colorado employees and will be hiring more before its Colorado Springs location opens in 2019, said Greg Raymond, who heads Children's southern Colorado operations. Children's recruits nationwide to fill openings and recently added a second person locally to help in recruiting, he said.

"It has always been a challenge to find people and it takes more time to find the right people," Raymond said. "We recruit not only from Denver, Albuquerque and Salt Lake City, but also along the East Coast, and we look at ways to provide incentives for them to move across the country. We need to sell Colorado Springs as a destination for workers."

- Lockheed Martin Corp. and Boecore Inc.: Lockheed has more than 1,000 openings in Colorado, including 140 in the Springs at its Rotary and Mission Systems unit, which includes its computer systems, software and hardware operations, said Rob Smith, a company vice president who heads a unit specializing in command, control, communications, computers, intelligence, surveillance and reconnaissance. Some of the positions have been open for a year, though Lockheed has reduced the number of openings with job fairs in the Springs and Denver, he said.

The company has focused much of its recruiting on new college graduates through relationships it has formed with more than 100 colleges and universities nationwide, and that has paid off with more than 1,500 new graduate hires nationwide along with another 1,500 interns that Lockheed hopes to hire as full-time employees, Smith said. Lockheed also found a fertile recruiting ground among military who are retiring or separating from the service - veterans make up nearly a third of the company's new hires - at job fairs held annually at 150 military bases nationwide.

"There is a shortage of science, technology, engineering and math graduates and that challenge will become more challenging as the current workforce retires. There are not enough new graduates to fill those jobs. It is a challenge today and it will get more acute in coming years," Smith said.

- Walmart: The retail giant opened a training academy in May at its Pueblo West store, the third such location in the state after two opened six months earlier in Aurora and Lafayette. The Pueblo West location serves 26 southern Colorado Walmart stores, Neighborhood Markets and Sam's Club stores and trains 15-30 supervisors and managers for about two weeks on "core retail skills" and how to run the department to which they will be assigned, said Tiffany Wilson, a Walmart spokeswoman. The company hopes to have 200 academies open by year's end and eventually train all new employees.

The academies "build a stronger pipeline for talent for Walmart," Wilson said. The academies help "supervisors build skills to lead associates. We want consistent customer service." The company added 440 employees to its Colorado workforce in the fiscal year ended April 30 and plans to add another 300 positions in the current fiscal year, she said.

- The Airplane Restaurant: Most Colorado restaurants are "feeling the pressure" of a tight labor market, but none are critically short-staffed, said Steve Kanatzar, owner of the southeast Colorado Springs eatery.

"It is easy to fill openings if you are looking for somebody who is not as qualified as others. But to find somebody who is a good fit for your restaurant takes longer.," Kanatzar said. "Everybody complains about how difficult it is to fill openings, but it is more acute in Denver than in Colorado Springs. I don't see it getting better any time soon or (the job market) loosening up in the near future."

- Elder Construction and Berwick Electric: Finding qualified carpenters, drywallers, concrete workers and the like has been a problem for local construction companies and homebuilders for several years, industry members have said.

But the problem became particularly acute over the last two to three years; an improved economy that's led to increased homebuilding and commercial construction, a de-emphasis of high school vocational programs for young people and competition for workers with Denver and other markets are among factors that have combined to create a shortage of construction workers.

"It's been that way for years, it has not improved," said Jim Howard, this year's El Paso County Contractors Association board president and a general superintendent with Elder Construction of Colorado Springs and Windsor. "It's not like there's a new influx of labor to pick from. I think everybody continues to struggle looking for good help."

Elder employs about 50 people, and is looking to fill three jobs, including hiring a project manager, Howard said. To attract the people it wants, and as incentive for employees who might want a career in construction, Elder offers vacation and holiday pay, a retirement plan and other benefits, he said.

Berwick Electric, a nearly century-old Colorado Springs company that employs about 140 people, has had more trouble hiring project managers, estimators and computer aided drafting operators - people in highly skilled position of leadership and management, said company president Doug Berwick.

Such upper-level positions are typically filled by people who don't move from job to job and who are the last to be let go by their employers when times get bad, he said.

"They'll always try to hold onto the most experienced, leadership people who can run a crew of people," Berwick said.